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How do I calculate NET amount after taxes for the contract job taken in Toronto in year of 2016? Let's say, for example, I did my job for 50 CAD/hour before any taxes.

I am residing in Toronto since June of 2016. My client is in Toronto as well.

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    I'm voting to close this question as off-topic because it isn't really a good fit for the stackexchange format - recommendations for calculator websites will go out of date, tax laws will change, websites go down, etc. – user152 Jul 23 '16 at 18:23
  • @stacey , I changed the question. I am interested in solution of the problem (the problem - I do not know how to calculate) rather than in tools that solve the problem (on-line calculator, third party link, etc.), so I removed the need for calculator. You are right, tax laws differ from year to year, so I also added year of 2016 to specify the need. Hope the question became acceptable now and the answer will appear soon. – Paulius Jul 25 '16 at 2:01
  • Well, now it seems like a question for a Canadian accountant.... not that there aren't freelance accountants. I just don't think there are any that visit this site. – Scott Jul 25 '16 at 2:29
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You pay a lot of taxes that are not linked 1-on-1 with a single job, so you'll never get an exact number for that. However, as a freelancer I use a very simple calculation that works accurate enough so far (the same might exist for Toronto): taking ALL taxes into account, basically 50% of what I invoice is NET, i.e. if I take all my revenue at the end of the year and subtract all that I pay in various taxes (e.g. tax on the salary I pay myself, corporation tax, social security payments, profit tax, etc.) I'm left with 50% to actually spend on net salary, investments, expenses etc.

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As an unincorporated independent contractor, your income from contract work will be subject to tax as personal business income. Your net income can be calculated with the formula:

(Gross Income - Expenses) x (1 - Tax rate)

Below are the taxes that make up your tax rate:

  1. CPP Currently 9.9% on self-employed business income
  2. Average Federal Income Tax Rate (0% - 33%)
  3. Average Provincial Income Tax (Ontario is 0% - 13.16%)

To find the average tax rate, use the formula for each federal and provincial:

(Total Tax - Income Tax Credits) / Taxable Income

Tax rates and calculations ca be found here: http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

Tax credits vary on your personal situation, but always include the basic $11,474 for federal tax and $10,011 for Ontario tax.

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